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PEX Water Pipes: 6 Ways Insurers Must Manage Risks

Second to a building fire, water system failures are the most expensive perils in the construction insurer’s risk portfolio.  But there is little incentive for anyone to protect the insurer: After the engineering design for a plumbing system is done, the contractors are only liable for workmanship, and the manufacturer is only liable for materials. The insurer is liable for everything else.

The insurer must be aware of the pitfalls of a water system installation to both write the exclusions and investigate for liable cause in the event of a failure.

This article discusses a very popular plumbing material commonly referred to as PEX and addresses issues that may not be found in the actuarial tables.

PEX stands for “cross-linked polyethylene.” It is a relatively new material (less than 20 years) that has gained widespread acceptance in new construction piping and renovation re-piping for potable water systems. The reasons are obvious – PEX has flex; it is inexpensive; and the installation is fast, simple and reliable. Also, PEX will not burst in freezing conditions like CPVC or copper. PEX installations older than 30 years are common in Europe, with an excellent reliability record. PEX is especially desirable on re-pipes because it can greatly reduce the size of intrusions into walls, as plumbers can snake the material across smaller openings.

Unfortunately, there is some vulnerability that the insurer needs to be aware of. While we would always recommend obtaining a professional engineering opinion for assessing a PEX system, this short article will help the insurer understand what PEX is and how to evaluate the big vulnerabilities to using it: brass fittings, UV exposure, water quality and even vermin!.


Cross-linked polyethylene is a modification of polyethylene plastic commonly found in children’s playground equipment. Cross-linking means that the individual “mers” in the “polymer” are bunched up into knots instead of aligned in one direction. This knotting allows the material to return to its original size and shape after being stretched. This is great for holding on to fittings, bending around corners and expanding under pressure, heat or even freezing conditions.

PEX is very fast to install and can be threaded through walls without having to necessarily cut out large sections of wallboard. Connections can be inspected visually with great reliability, and precise measurement is not as critical as it is with materials such as copper and CPVC. PEX has been widely used for several decades, with broad acceptance in the market and universal familiarity in the plumbing trade. Many different companies support PEX products with accessories and connectors such as manifolds, hangers and specialty adapters.

Concerns — and Answers

PEX is clearly not without its own problems. Fortunately, many of them may be avoidable. In the engineering profession, we understand that it is rare for one single problem to cause a failure; rather, it is the combination of two or more problems that lead to the major accidents. Many times, accidents occur when one party does not communicate with another. With PEX, the owner, contractors, builders, maintenance personnel, etc. must be aware of the system configuration and have a plan for interacting with the system.

An insurer can have a strong impact in this area by specifying full disclosure of the hazards. For this reason, engineering counsel is often warranted in a complex system, to assist in assessing risks. Here are six areas that need to be addressed:

— One risk is dezincification of the brass used in fittings. When the zinc content in the brass (an alloy of copper and zinc) is too high, it can corrode away. That leaves a weak and porous copper shell, which can lead to failure conditions ranging from persistent leaks to catastrophic breach of a pressurized line.  At least one class action was filed against the makers of a particular brass fitting that was failing in service and causing substantial property damage. The root cause was found to be the dezincification of fittings (generally purchased in big box hardware stores and made cheaply overseas). This suit was settled for $90 million.

The problem of dezincification is now easily avoidable. The owner of a building should specify low-zinc brass fittings or use “engineered plastic” fitting components.

— PEX was also suspected of leaching controversial chemicals such as MBTA, TBA and BPA that are considered toxic. While we cannot testify to the specifics of this claim, the state of California has banned PEX in many buildings. Given the segmented nature of permitting jurisdictions in the U.S., insurers should be aware of these concerns.

It is generally accepted that of the three types of PEX (called type A, B and C), type B is the only formulation that does not have any leaching considerations. Leaching concerns can be avoided by giving proper attention to leaching considerations as well as strength and temperature ratings among the three varieties. Insurers should be diligent about knowing what type of PEX is being used.

— The stabilizers in PEX are highly vulnerable to breaking down under UV radiation — while some sources may claim that some UV exposure is acceptable, we advise that all precautions should be taken to shield this material from UV rays. Even fluorescent lamps and CFLs are to be avoided, especially where piping is routed through a ceiling and may interact with recessed fluorescent lighting. There are many shielding products available to solve this problem. However, PEX is best-suited to total darkness. An insurer can easily specify protection from UV.

— PEX is also known to be slightly vulnerable to chlorinated water and possibly copper ions, resulting from copper corrosion upstream. The temperature rating of the water must be strictly adhered to. Alone, these factors may not be worrisome in many applications. However, when combined with other aggravating factors, the aggressiveness of the water may amplify hazard potential. A test of water chemistry is advisable.

— Most reputable builders will shield a PEX installation to keep a future owner or contractor from, say, hammering a nail into the wall and hitting the PEX. Homeowners should be aware of the potential to cause a leak by intruding through a wall with a nail or saw. Some contractors will use a thermal measurement device to identify water piping before cutting into a wall for any other reason. It is important for everyone who can interface with the system to know where PEX pipes are before cutting into a wall.

— We have seen several instances where mysterious leaks appear in PEX installations when rodents are exterminated. The poison that is often used to kill small animals causes them to become very thirsty and seek water. Rats appear to be especially clever and can discern the sound of water flowing through PEX pipes – then rapidly chew through the PEX to access water. Make sure that all hired contractors — from electricians to exterminators — are licensed and experienced when interacting with a building that has a PEX system.


It can be seen that failures will most likely occur from the combination of two or more seemingly unrelated problems. It is rare that any single person or contractor is aware – on a scientific basis – of all these factors and the way that they can interact with each other. The owner of a building or maintenance personnel cannot be expected to know all of these details – they just install what they buy at the supply shop. It is important that the insurer is aware and able to assess or mitigate the vulnerabilities of PEX and watch the installation closely. A vigilant insurer will retain engineering counsel to oversee building specifications, construction, maintenance and forensics.

Addressing Condominium Water Failures Before They Happen

In the heyday of the real estate bubble, developers flipped tens of thousands of apartment structures into condominiums — with little regard for the condition of the potable water system. Many of these galvanized steel or early copper systems are rapidly approaching the end of their service life. Unseen, a small leak can cause thousands of dollars of damage and a ruptured main riser can amount to millions of dollars in claims and severe hardship for the community of homeowners.

While it may be tempting to react to failure statistics, not all water systems are equal. Water chemistry varies substantially across the country, as do workmanship and materials quality — these variables may have a greater influence on mode and consequences of the failure than the age of the system itself. The least appropriate action may be for the insurer to put the community in an emergency situation. Poor or rushed Homeowners Association (HOA) decisions can end up costing everyone far more than a properly replaced system that is well planned.

Insurers must first help the community to resolve to replace their potable water system. Then, they must encourage the community to have a comprehensive piping condition assessment overseen by a qualified engineering representative. It is essential to determine the stability of the existing system without the threat of policy cancellation. Small leaks may be tolerable as long as the possibility of a large rupture is fairly remote — they are not necessarily related conditions. Once these probabilities are known, then good decisions regarding a replacement system can be made.

Unfortunately, the Homeowners Association board is often left with a daunting task of selecting the right technology that both heals the pain and fits the budget. All pipe renewal solutions have different risks and vulnerabilities and many Homeowners Associations can fall for a slick contractor peddling inferior products. Potable water is a matter than requires rational analysis.

Piping Materials:
The three main classifications of piping renewal materials on the market include epoxy liner, copper re-pipe, or a variety of plastic products. All have vulnerabilities and limitations so it is important for the insurer to take a deep hard look at the risks while the Homeowners Association can focus on the costs.

Epoxy Pipe Liner
Epoxy pipe liner is a continuous paint-like coating that is blown through an existing pipe system that has been cleaned by an abrasive sandblasting. Epoxy has the advantage of being relatively fast and minimally invasive. The problem with epoxy is there is no certain way to know the pipe is clean on the inside and no certain way to know if the cleaning process compromises the strength of the pipe. Finally, if we were to test the epoxy, and adhesion is shown to be poor — then what? There is no way to remove the epoxy and breaking the continuity of the coating breaks the protection. Our research has found that an epoxy failure can very likely happen at the exact place where the pipe is already at its weakest. This does little to mitigate the peril of the multi-million dollar rupture claim. While we are confident that epoxy may be applied correctly, we are not confident the epoxy would be risk/cost competitive over a far superior re-pipe.

New Copper Re-pipe
Copper is very familiar to most people from its use in the penny. The tarnish that forms on copper actually protects it from corrosion. Under the right conditions, a 50-year service life is a reasonable expectation if that tarnish coat is not disrupted. Copper plumbing has been extensively studied and many professional codes and standards apply to its use. Consequently, many copper failures can be traced directly back as failures to apply these standards: improper design, poor workmanship, aggressive water chemistry, or inferior materials, etc. All are known perils, which may be avoided or mitigated with the assistance of a good technical advisor representing the best interest of the owners.

Cross Linked Polyethylene (PEX)
PEX is a white or colored plastic that is fairly stiff but also quite flexible. A slightly weaker form is commonly used in plastic milk jugs. PEX has been used in the US for 20-25 years, and has demonstrated an excellent track record in millions of installations. PEX is easy to install, relatively low cost, and enjoys broad market acceptance. PEX has two main problems — both of which are avoidable. Lawsuits have been filed over failures due to “dezincification” of low cost brass fittings. It is extremely important to avoid some sources of fittings with high zinc composition in alloy. Lawsuits have also been filed over the leaching of chemical compounds from types A and C PEX — the use of Type B PEX largely eliminates this problem. Again, a good owner's representative can help navigate this landscape. Many other plastic piping materials exist, but not without similar controversies.

New Polypropylene Pipe
A newcomer to the pipe materials selection is polypropylene — polypropylene is a common recyclable material with important uses in medical and food grade applications. Polypropylene is a very simple molecule of carbon and hydrogen — nothing bad goes in so nothing bad can leach out. While new to the US, we have traced its use in Europe to at least 30 years back with a very low failure incident rate. Polypropylene has excellent thermal and acoustic properties and is widely considered the most environmentally friendly piping material available. Some disadvantages are that special fusing irons and specially trained installers are required.

Water system renewal can be a confusing process — and certainly not a hands-off affair for the insurer. A qualified owner's representative is needed to help navigate the landscape of technologies and contractors who sell them. When the project is complete, the representative can help petition the underwriter, the financial industry, and the real estate market for adjustments that reflect the value of your renewed new system. The technical representative can help eliminate engineering and construction risks without interfering with the normal dynamics of a wise and proactive homeowners association.